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Retail jobs are better than you might think

Many workers shy away from retail jobs believing they're occupations with low pay, low benefits and low opportunity. Is this true? Are they mostly dead-end, minimum wage jobs?

Recent research suggests that while these jobs do not pay as well as jobs in the manufacturing sector, large, modern, multi-establishment retail chains pay better than many people believe and offer better opportunities for advancement than many other occupations.

The research, "Do Large Modern Retailers Pay Premium Wages?" by Brianna Cardiff-Hicks, Francine Lafontaine and Kathryn Shaw for the National Bureau of Economic Research, finds that the average hourly wage in retail is approximately 68 percent of the wage paid in manufacturing. However, retail pays better than service sector jobs: "...service occupations paid $13.97 and $11.15 for men and women, respectively, while retail occupations paid $16.28 and $12.79..."

In addition, although retail jobs pay less on average than manufacturing jobs, employment in manufacturing has declining, while the growth in retail has been "pronounced." In 1963, multi-establishment retail chains accounted for 20 percent of all retail. But by 2000, the share had grown to 35 percent, and it has continued to grow since.

Furthermore, and importantly, retail jobs offer more opportunity for advancement than most other jobs due to the high rate of growth of retail establishments and the multi-tiered nature of these firms. And when workers advance, their pay rises considerably. For example, the authors find that

"an entry level cashier in a Wal-Mart store earns $8.48 per hour, but a Supervisor earns $14.38 per hour. Turning to jobs that are salaried, pay rises: a Shift Manager earns $62,837 and a Store Manager earns $92,462. Wal-Mart is at the mid-point of our set of cases. Starbucks pays less; its establishments are smaller. The high-end grocery and big-box stores, of Whole Foods and Costco, pay higher wages. While these are but a few examples, they illustrate well some of the overall patterns revealed in the analyses..."

There is, of course, the chance that technological change such as retail delivery by drones will make these jobs less attractive in the future. But for now, the bottom line for the authors is "The retail sector pays considerably less than manufacturing, but as the manufacturing sector has declined over time, the growth of modern retail chains has increased retail wages and provided more promotion opportunities, particularly for the more able worker."

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